Debt Consolidation Is Not Enough Without Money Management!
Consolidating your credit card debt is a great step towards becoming debt free. But unless you learn some money management skills you are at risk of repeating the same mistakes that took you to debt accumulation.
Credit card debt accumulates all too easily and thus, once your credit card debt is paid off due to resorting to credit card debt consolidation, you will be tempted to use your credit cards again. The problem is that chances are that you will control yourself only the first days or months, but without money management skills, sooner or later youíll start accumulating debt again.
Negative Consequences of Credit Card Debt Consolidation
Though credit card debt will ease your financial life and provide you with lower monthly payments and a significant reduction of your overall debt, it also provides you with a sense of security and safety that shouldnít be there. After all, you are still in debt and now, your debt is secured by your property which means that if you donít pay it, you may lose your home.
Itís not uncommon to see how someone after consolidating credit card debt with a home equity loan starts using credit cards again uncontrollably and spending over his repayment capacity till reaching an amount of debt equal or worse than the one he just escaped from by consolidating his debt. Plus, as stated above, the situation is always worse because the previous debt is now secured.
Thus, unless you obtain the necessary discipline to control your spending, debt consolidation may only be a partial and temporary solution to your debt problems. And that is the reason why we insist on the fact that debt consolidation should always be followed by money management learning through counseling or courses so as to avoid repeating the same mistakes.
Solutions That Money Management Provides
Money management will aid you in solving such problems by providing you with the tools and knowledge to manage your finances more efficiently. It will teach you budgeting skills so you can foresee your expenses and plan ahead to have enough money available to cope with them without having to resort to expensive sources of finance.
It will also teach you how to keep your lifestyle or even improve it without spending more or even spending less than what you are currently spending to support it. Efficient spending is one of the keys to money management that makes a huge difference when the problem is debt accumulation and lack of a suitable income to build up some savings.
Finally, money management will also aid you in finding appropriate investments to make your savings generate profits. This way, your savings will continue to increase and youíll beat inflation which is essential to maintain your nest egg and keep your income to spending ratio in a suitable level to avoid building up debt and incurring in the same problems that lead you to pursue debt consolidation.
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ABOUT THE AUTHOR
Joycelyn Crawford is the author of this article. For more information about Easy Loans for Bad Credit and Easy Personal Loans please visit her site http://www.easyloanforyou.com